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Divided Democrats Put Obama in a State of the Union Squeeze

Liberals want the president to tackle income inequality; moderates want him to focus on economic growth.

NEW YORK, NY - OCTOBER 25: U.S. President Barack Obama pauses while speaking at the Pathways in Technology Early College High School in the Crown Heights section of Brooklyn on October 25, 2013 in New York City. President Obama had mentioned the school in a part of Brooklyn that's struggled with poverty and violence during his State of the Union address in February. While in New York Obama will also attend events to raise money for the Democratic National Committee and Democratic Congressional Campaign Committee.

As the White House drafts a sixth State of the Uni­on ad­dress, signs of strain are emer­ging with­in the Demo­crat­ic Party, with lib­er­als push­ing the pres­id­ent to be more out­spoken about the eco­nom­ic is­sues that now drive voter dis­sat­is­fac­tion. And while the speech isn’t likely to make a big im­pact on what policies get through Con­gress, it could have a last­ing ef­fect on the dir­ec­tion of Demo­crat­ic polit­ics.

In­deed, this year’s ad­dress is shap­ing up to be an op­por­tun­ity for the White House to bridge the di­vide between the party’s pop­u­lists and Clin­ton-era cent­rists. But there’s little sign Pres­id­ent Obama will do that.

Throughout his two terms, he has as­sidu­ously avoided tak­ing sides, gov­ern­ing more like a lib­er­al but com­mu­nic­at­ing like a post-par­tis­an cent­rist. That’s not sur­pris­ing, giv­en Obama’s 2012 co­ali­tion was made up of both af­flu­ent, col­lege-edu­cated whites and work­ing-class minor­it­ies — which served to over­shad­ow the fact that their in­terests aren’t al­ways aligned.

Des­pite the dif­fer­ences, the party has re­mained re­mark­ably united, even with the un­pop­ular­ity of Obama­care, the near-ex­tinc­tion of its fisc­ally con­ser­vat­ive Blue Dog wing, and Obama’s own de­clin­ing ap­prov­al rat­ings. But that’s start­ing to change.

“Obama needs to be re­spons­ive to where the pub­lic is. He should not over­rate the com­pon­ent of the Obama co­ali­tion that is the af­flu­ent in the same breath as the oth­ers,” said AFL-CIO Polit­ic­al Dir­ect­or Mi­chael Pod­horzer. “The real co­ali­tion that elec­ted Obama was one that over­whelm­ingly is not mak­ing it in the eco­nomy.”

Obama plans to use the speech to talk about Demo­crats’ cam­paign-year theme of in­come in­equal­ity, and he’ll fo­cus on pock­et­book is­sues like col­lege af­ford­ab­il­ity, work­place leave policies, ex­tend­ing un­em­ploy­ment be­ne­fits, and the party’s sig­na­ture min­im­um-wage ini­ti­at­ive for 2014.

But with the eco­nomy still sput­ter­ing, it’s un­clear wheth­er re­vis­it­ing these pre­vi­ous pro­pos­als will be enough to sat­is­fy either side.

The party’s cent­rist wing, which gen­er­ally backs en­ti­tle­ment re­forms and free-trade agree­ments that ap­peal to the more af­flu­ent, wants Obama to use the speech to con­vey an eco­nom­ic-growth mes­sage. The lib­er­al wing is ur­ging a more con­front­a­tion­al ap­proach to­ward Wall Street and high­er taxes on the wealth­i­est Amer­ic­ans.

The dis­pute was crys­tal­lized in the re­ac­tion to a Wall Street Journ­al op-ed from Third Way Pres­id­ent Jon Cow­an and Seni­or Vice Pres­id­ent for Policy Jim Kessler last month, ar­guing “eco­nom­ic pop­u­lism is a dead end for Demo­crats.” The op-ed drew scath­ing cri­ti­cism from lib­er­al groups, with the Pro­gress­ive Change Cam­paign Com­mit­tee — an or­gan­iz­a­tion boost­ing Sen. Eliza­beth War­ren of Mas­sachu­setts — de­mand­ing that Demo­crats cut ties from the group, and ac­cus­ing Third Way of shil­ling for big busi­ness.

“In­come in­equal­ity is a phe­nomen­on that’s hap­pen­ing that needs to be talked about. But when you get to the solu­tions, you run out of the easy things to do and then you get to what are we really go­ing to do to im­prove the schools, cre­ate jobs, and im­prove the eco­nomy,” said Kessler. “I think the pres­id­ent does a pretty good bal­an­cing act on these things. He poin­ted out in­come in­equal­ity as a vex­ing prob­lem, but he also talked about trade deals and hav­ing more growth.”

It will be dif­fi­cult for the ad­min­is­tra­tion to both strike that bal­ance and achieve its main polit­ic­al goal of 2014 — hold­ing onto the Sen­ate.

The White House has been hold­ing private meet­ings with sen­at­ors up for reelec­tion, bet­ting that red-state Demo­crats can be­ne­fit from eco­nom­ic ini­ti­at­ives framed in a pop­u­list man­ner. But with Obama’s ap­prov­al rat­ings in bad shape in these states, that strategy could be a los­ing one.

“There are go­ing to be times when, be­cause you’re in a con­ser­vat­ive state, there’s go­ing to be move­ment to where you dis­tin­guish your­self from the pres­id­ent,” said Demo­crat­ic poll­ster John An­za­lone, who’s work­ing for Sen. Kay Hagan of North Car­o­lina. (Hagan not­ably skipped Obama’s eco­nom­ic speech at North Car­o­lina State Uni­versity last week.) “But that’s not in­com­pat­ible with the lar­ger mes­sage on the middle class.”

In his weekly ad­dress, Obama said that his State of the Uni­on will “mo­bil­ize the coun­try around the na­tion­al mis­sion of mak­ing sure our eco­nomy of­fers every­one who works hard a fair shot at op­por­tun­ity and suc­cess.” That means dif­fer­ent things to dif­fer­ent sup­port­ers.

The test for the pres­id­ent is wheth­er he can con­tin­ue to straddle the middle ground when his al­lies are out­spoken as ever about a more am­bi­tious course of ac­tion.

“We’re con­cerned that there are some in the Demo­crat­ic party, some in the pro­gress­ive move­ment that want to aban­don the Clin­ton leg­acy and move to a more left-wing agenda where growth is an af­ter­thought,” said Kessler. “It’s most im­port­ant to chal­lenge our own doc­trines and as­sump­tions. That’s where we find cre­at­ive solu­tions.”

The Fed has raised rates another quarter point, to a target rate of 1.25 percent to 1.5 percent. Two members dissented in favor of keeping rates stable. As of this moment, they expect to make three more quarter-point hikes in 2018, and two in 2019. This meeting of the Federal Open Market Committee was Janet Yellen's last as chair.

At a hearing before the House Judiciary Committee today, Deputy Attorney General Rod Rosenstein said "there's nothing inappropriate about FBI officials on special counsel Robert Mueller's team holding political opinions so long as it doesn't affect their work." Chairman Bob Goodlatte (R-Va.) said recently disclosed texts among former members of Mueller's team, "which were turned over to the panel Tuesday night by the Justice Department, revealed 'extreme bias.'"